(a)Power of Commissioner. With respect to any insurer or health maintenance organization registered under § 56-11-105, and in accordance with subsection (c), the commissioner shall also have the power to participate in a supervisory college for any domestic insurer or health maintenance organization that is part of an insurance holding company system with international operations in order to determine compliance by the insurer or health maintenance organization with this title. The powers of the commissioner with respect to supervisory colleges include, but are not limited to, the following:
Terms Used In Tennessee Code 56-11-116
Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
Enterprise Risk: means any activity, circumstance, event or series of events involving one (1) or more affiliates of an insurer that, if not remedied promptly, is likely to have a material adverse effect upon the financial condition or liquidity of the insurer or its insurance holding company system as a whole, including, but not limited to, anything that would cause the insurer's Risk-Based Capital to fall into company action level as set forth in §. See Tennessee Code 56-11-101
Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
Group-wide supervisor: means the regulatory official authorized to engage in conducting and coordinating group-wide supervision activities who is determined or acknowledged by the commissioner under §. See Tennessee Code 56-11-101
Insurance holding company system: means two (2) or more affiliated persons, one (1) or more of which is an insurer. See Tennessee Code 56-11-101
Internationally active insurance group: means an insurance holding company system that includes an insurer registered under §. See Tennessee Code 56-11-101
Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
Person: means an individual, a corporation, a limited liability company, a partnership, an association, a joint stock company, a trust, an unincorporated organization, any similar entity or any combination of the foregoing acting in concert, but does not include any joint venture partnership exclusively engaged in owning, managing, leasing or developing real or tangible personal property. See Tennessee Code 56-11-101
Reciprocal: means the aggregation of subscribers under a common name. See Tennessee Code 56-16-102
State: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
United States: includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
written: includes printing, typewriting, engraving, lithography, and any other mode of representing words and letters. See Tennessee Code 1-3-105
(1) Initiating the establishment of a supervisory college;(2) Clarifying the membership and participation of other supervisors in the supervisory college;(3) Clarifying the functions of the supervisory college and the role of other regulators, including the establishment of a group-wide supervisor;(4) Coordinating the ongoing activities of the supervisory college, including planning meetings, supervisory activities, and processes for information sharing; and(5) Establishing a crisis management plan.(b)Expenses.(1) Each registered insurer or health maintenance organization subject to this section shall be liable for and shall pay the reasonable expenses of the commissioner’s participation in a supervisory college in accordance with subsection (c), including reasonable travel expenses.(2) For purposes of this section, a supervisory college may be convened as either a temporary or permanent forum for communication and cooperation between the regulators charged with the supervision of the insurer or health maintenance organization or its affiliates, and the commissioner may establish a regular assessment to the insurer or health maintenance organization for the payment of these expenses.(c)Supervisory College. In order to assess the business strategy, financial position, legal and regulatory position, risk exposure, risk management and governance processes, and as part of the examination of individual insurers in accordance with § 56-11-107, the commissioner may participate in a supervisory college with other regulators charged with supervision of the insurer or health maintenance organization or its affiliates, including other state, federal and international regulatory agencies. The commissioner may enter into agreements in accordance with § 56-11-108(c) providing the basis for cooperation between the commissioner and the other regulatory agencies, and the activities of the supervisory college. Nothing in this section shall delegate to the supervisory college the authority of the commissioner to regulate or supervise the insurer or its affiliates within its jurisdiction.(d)Group-Wide Supervision of Internationally Active Insurance Groups.(1)(A) The commissioner is authorized to act as the group-wide supervisor for any internationally active insurance group in accordance with this section. However, the commissioner may also acknowledge that another regulatory official shall serve as the group-wide supervisor if the internationally active insurance group:
(i) Does not have substantial insurance operations in the United States;(ii) Has substantial insurance operations in the United States, but not in this state; or(iii) Has substantial insurance operations in the United States and this state, but the commissioner has determined pursuant to the factors set forth in subdivisions (d)(2) and (6) that the other regulatory official is the appropriate group-wide supervisor.(B) An insurance holding company system that does not otherwise qualify as an internationally active insurance group may request that the commissioner make a determination or acknowledgment as to a group-wide supervisor pursuant to this section.(2)(A) In cooperation with other state, federal, and international regulatory agencies, the commissioner shall identify a single group-wide supervisor for an internationally active insurance group. The commissioner may determine that the commissioner is the appropriate group-wide supervisor for an internationally active insurance group that conducts substantial insurance operations concentrated in this state, or the commissioner may acknowledge that a regulatory official from another jurisdiction is the appropriate group-wide supervisor for the internationally active insurance group. The commissioner shall consider the following factors when making a determination or acknowledgement under this subsection (d):
(i) The place of domicile of the insurers within the internationally active insurance group that hold the largest share of the group’s written premiums, assets, or liabilities;(ii) The place of domicile of the top-tiered insurer or insurers in the insurance holding company system of the internationally active insurance group;(iii) The location of the executive offices or largest operational offices of the internationally active insurance group;(iv) Whether another regulatory official is acting or is seeking to act as the group-wide supervisor under a regulatory system that the commissioner determines to be:
(a) Substantially similar to the system of regulation provided under the laws of this state; or(b) Otherwise sufficient in terms of providing for group-wide supervision, enterprise risk analysis, and cooperation with other regulatory officials; and(v) Whether another regulatory official acting or seeking to act as the group-wide supervisor provides the commissioner with reasonably reciprocal recognition and cooperation.(B) However, a regulatory official identified under this section as the group-wide supervisor may determine that it is appropriate to acknowledge another supervisor to serve as the group-wide supervisor. The acknowledgement of the group-wide supervisor must be made after consideration of the factors listed in subdivisions (d)(2)(A)(i)-(v), and must be made in cooperation with and subject to the acknowledgement of other regulatory officials involved with the supervision of members of the internationally active insurance group, and in consultation with the internationally active insurance group.(3) Notwithstanding any other law, when another regulatory official is acting as the group-wide supervisor of an internationally active insurance group, the commissioner shall acknowledge that regulatory official as the group-wide supervisor. However, the commissioner shall make a determination or acknowledgement as to the appropriate group-wide supervisor for the internationally active insurance group pursuant to subdivision (d)(2) if a material change in the internationally active insurance group results in:
(A) The internationally active insurance group’s insurers domiciled in this state holding the largest share of the group’s premiums, assets, or liabilities; or(B) This state being the place of domicile of the top-tiered insurer or insurers in the insurance holding company system of the internationally active insurance group.(4) Pursuant to § 56-11-107, the commissioner is authorized to collect from any insurer registered pursuant to § 56-11-105 all information necessary to determine whether the commissioner may act as the group-wide supervisor of an internationally active insurance group or if the commissioner may acknowledge another regulatory official to act as the group-wide supervisor. Prior to issuing a determination that an internationally active insurance group is subject to group-wide supervision by the commissioner, the commissioner shall notify the insurer registered pursuant to § 56-11-105 and the ultimate controlling person within the internationally active insurance group. The internationally active insurance group has not less than thirty (30) days to provide the commissioner with additional information pertinent to the pending determination. The commissioner shall publish on the website of the department the identity of internationally active insurance groups that the commissioner has determined are subject to group-wide supervision by the commissioner.(5) If the commissioner is the group-wide supervisor for an internationally active insurance group, the commissioner is authorized to:
(A) Assess the enterprise risks within the internationally active insurance group to ensure that:
(i) The material financial condition and liquidity risks to the members of the internationally active insurance group that are engaged in the business of insurance are identified by management; and(ii) Reasonable and effective mitigation measures are in place;(B) Request, from any member of an internationally active insurance group subject to the commissioner’s supervision, information necessary and appropriate to assess enterprise risk, including, but not limited to, information about the members of the internationally active insurance group regarding:
(i) Governance, risk assessment, and management;(ii) Capital adequacy; and(iii) Material intercompany transactions;(C) Coordinate and, through the authority of the regulatory officials of the jurisdictions where members of the internationally active insurance group are domiciled, compel development and implementation of reasonable measures designed to ensure that the internationally active insurance group is able to timely recognize and mitigate enterprise risks to members of the internationally active insurance group that are engaged in the business of insurance;(D) Communicate with other state, federal, or international regulatory agencies for members within the internationally active insurance group and share relevant information subject to the confidentiality provisions of § 56-11-108, through supervisory colleges as set forth in this section, or otherwise;(E) Enter into agreements with or obtain documentation from any insurer registered under § 56-11-105, any member of the internationally active insurance group, and any other state, federal, or international regulatory agencies for members of the internationally active insurance group, providing the basis for or otherwise clarifying the commissioner’s role as group-wide supervisor, including provisions for resolving disputes with other regulatory officials. The agreements or documentation do not serve as evidence in any proceeding that any insurer or person with an insurance holding company system not domiciled or incorporated in this state is doing business in this state or is otherwise subject to jurisdiction in this state; and(F) Engage in other group-wide supervision activities consistent with the authority and purposes enumerated in this section and considered necessary by the commissioner.(6) If the commissioner acknowledges that another regulatory official from a jurisdiction that is not accredited by the National Association of Insurance Commissioners is the group-wide supervisor, the commissioner is authorized to reasonably cooperate, through supervisory colleges or otherwise, with group-wide supervision undertaken by the group-wide supervisor if:
(A) The commissioner’s cooperation complies with the laws of this state; and(B) The regulatory official acknowledged as the group-wide supervisor also recognizes and cooperates with the commissioner’s activities as a group-wide supervisor for other internationally active insurance groups where applicable. Where such recognition and cooperation is not reasonably reciprocal, the commissioner is authorized to refuse recognition and cooperation.(7) The commissioner is authorized to enter into agreements with or obtain documentation from any insurer registered under § 56-11-105, any affiliate of the insurer, and other state, federal, or international regulatory agencies for members of the internationally active insurance group that provide the basis for or otherwise clarify a regulatory official’s role as group-wide supervisor.(8) The commissioner may promulgate rules necessary for the administration of this section. All rules must be promulgated in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.(9) A registered insurer subject to this section is liable for and shall pay the reasonable expenses of the commissioner’s participation in the administration of this section, including the engagement of attorneys, actuaries, and any other professionals, and all reasonable travel expenses.
